WEBVTT - OPEC+ Slows Production and UBS Job Cuts

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<v Speaker 1>This is Bloomberg Daybreak Asia for this Monday, April third

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<v Speaker 1>in Hong Kong, Sunday April second in New York. Coming

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<v Speaker 1>up today, OPEC Plus announces a surprise cut in oil

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<v Speaker 1>production of more than a million barrels a day. Tesla

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<v Speaker 1>deliveries rise to a record after the company cut prices

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<v Speaker 1>for evs and ubs. Will reportedly cut staff of up

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<v Speaker 1>to thirty percent after its takeover of Credit Suee China,

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<v Speaker 1>urging Japan not to join the US and the CHIP curbs.

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<v Speaker 1>This comes as Japan asks for the return of a

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<v Speaker 1>detained citizen from Beijing. Trump to be arraigned on Tuesday.

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<v Speaker 1>Explosion in Saint Petersburg kills Russian pro war blogger. I'm

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<v Speaker 1>at Baxter with Global News. That's all straight ahead on

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<v Speaker 1>Bloomberg Daybreak Asia, the business news you need to start

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<v Speaker 1>your day in just one fifteen minute podcast available on Apples, Spotify,

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<v Speaker 1>the Bloomberg Business app and everywhere you get your podcasts.

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<v Speaker 1>Good morning, I'm Richard Salaman and I'm Dak Krisner. Here

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<v Speaker 1>are the stories we're following today, and we're looking at

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<v Speaker 1>OPEC Plus because it announced the surprise oil production cut

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<v Speaker 1>of more than a million barrels a day. It abandoned

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<v Speaker 1>previous assurances that it would hold supply steady. Dumb Closer,

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<v Speaker 1>an analyst at Oil Price Information Service, as the move

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<v Speaker 1>is not a good one for the consumer. This is

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<v Speaker 1>probably worth another three, four or five dollars barrel and

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<v Speaker 1>the price succrued, and that means higher prices for gasoline, diesel,

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<v Speaker 1>jet fuel, you name it. The resulting price hikes could

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<v Speaker 1>cause more inflation, which may force center banks to keep

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<v Speaker 1>interest rates higher for longer. Might house calls OPEC plus

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<v Speaker 1>is a move ill advised under current market conditions. Today,

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<v Speaker 1>Saudi Arabia leather Cartel by pledging its own five hundred

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<v Speaker 1>thousand barrel a day supply reduction. Philommers including Kuwait, the

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<v Speaker 1>United Air Memorates and Algeria follows it, while Russia said

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<v Speaker 1>the production cut was it was implementing from March to

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<v Speaker 1>June would continue until the end of the year. UBS

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<v Speaker 1>is reportedly reducing its workforce by between twenty and thirty percent. Now.

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<v Speaker 1>These job cuts come after UBS completed its takeover of

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<v Speaker 1>Credit Suis. We have more from Bloomberg's Joe n Wang.

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<v Speaker 1>The Swiss newspaper Sontaks item reported as many as eleven

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<v Speaker 1>thousand UBS employees will be laid off in Switzerland and

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<v Speaker 1>another twenty five thousand will be let go worldwide. Both

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<v Speaker 1>UBS and Credit Suis together employed almost one hundred and

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<v Speaker 1>twenty five thousand people at the end of last year.

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<v Speaker 1>Now we hear some firms are gearing up to recruit

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<v Speaker 1>some of the investment bankers and wealth managers likely to

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<v Speaker 1>be let go. They include Joische Bank, Citigroup and JP Morgan. Separately,

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<v Speaker 1>The Financial Times reported Saturday that UBS has a shortlist

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<v Speaker 1>of four management consultants to advise on integrating Credit Suis.

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<v Speaker 1>The newspaper reported UBS is soon to decide between Bain

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<v Speaker 1>and Company, the Boston Consulting Group, McKinsey and Oliver Wyman

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<v Speaker 1>in Hong Kong, Joan Wang, Bloomberg Day Bricasia Well. In

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<v Speaker 1>another development, switch Land's Office of the Attorney General is

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<v Speaker 1>saying it has opened an investigation into UBS's takeover of

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<v Speaker 1>Credit Suite and the department is working to identify possible crimes. Rashard,

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<v Speaker 1>All right, well, let's have a look at Tesla now,

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<v Speaker 1>as it delivered a record four hundred and twenty two thousand,

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<v Speaker 1>eight hundred and seventy five cars worldwide in the first quarter,

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<v Speaker 1>and that compares with the bad what four twenty one

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<v Speaker 1>thousand that anlets have been expecting. Although deliveries were roughly

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<v Speaker 1>in line, Tesla would have to pick up the pace

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<v Speaker 1>of deliveries for the rest of the year. That's according

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<v Speaker 1>to Gene Munster Deepwater Asset Management, saying that Tesla deliveries

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<v Speaker 1>group thirty six percent from a year ago. But months

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<v Speaker 1>have pointed out that CEO Elon Muska's call for fifty

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<v Speaker 1>percent delivery growth during the company's last earnings call. Tesla

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<v Speaker 1>even slash prices early in the year to to boost demand.

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<v Speaker 1>After fourth quarter deliveries are disappointed, Elon Musk and Tesla

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<v Speaker 1>aiming to make between one point eight to two million

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<v Speaker 1>vehicles this year. Well, the inflation data released in the

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<v Speaker 1>US last Friday was below estimates. The core rate of

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<v Speaker 1>the Personal Consumption Expenditures Price Index or PC rose a

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<v Speaker 1>mere three tenths of one percent last month. Now, as

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<v Speaker 1>you know, this is the Fed's preferred measure of inflation.

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<v Speaker 1>This seems to suggest an end of an aggressive rate

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<v Speaker 1>hike cycle, maybe near an end. However, the head of

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<v Speaker 1>the Boston Fed as Susan Collins says it's simply too

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<v Speaker 1>early to assess whether FED policy where it will go next.

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<v Speaker 1>My assessment at the last meeting just last week with

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<v Speaker 1>the summary of economic projections did suggest an additional rate

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<v Speaker 1>hike and then pausing and holding over the year. But

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<v Speaker 1>I need to assess all of the data that's going

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<v Speaker 1>to come in between now and when our next meeting

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<v Speaker 1>is in early May. The new data that I've seen

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<v Speaker 1>just in the past week has not materially changed how

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<v Speaker 1>I'm thinking about things. Boston FED President Susan Collins. There,

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<v Speaker 1>she went on to say the American economy will likely

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<v Speaker 1>see some credit tightening as the result of the recent

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<v Speaker 1>turmoil seen in the banking system, and she said the

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<v Speaker 1>path to easing inflation would not necessarily trigger an economic downturn.

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<v Speaker 1>Rashot Yeah. And meantime, former Treasury Secretary Larry Summers said

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<v Speaker 1>it's too early to give any kind of all clear

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<v Speaker 1>sign on recent financial troubles in the US. Summers said

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<v Speaker 1>that there's well under a fifty percent chance of a

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<v Speaker 1>repeat of the bank runs that brought down Silicon Valley

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<v Speaker 1>Bank and Signature Bank earlier in March, but he did

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<v Speaker 1>say that there could still be some kind of other

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<v Speaker 1>accident that causes a constriction in credit. When you have

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<v Speaker 1>a series of earthquake tremors, it's a fairly long time

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<v Speaker 1>before you should be in a position to be confident

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<v Speaker 1>that you've seen the last of them. And that's why

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<v Speaker 1>the Fed's got such a difficult job. Summer said, it's

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<v Speaker 1>plausible the recent banking woes subside without a big impact

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<v Speaker 1>on credit, leaving in place serious inflation issues. In such

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<v Speaker 1>a scenario, he thinks the fair will have to tighten

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<v Speaker 1>much more than what is already priced into mukets. So

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<v Speaker 1>I think it goes without saying that our top story

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<v Speaker 1>today is this unexpected cut in production of crude oil

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<v Speaker 1>from OPEC plus, and I think it's fair to say

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<v Speaker 1>it's coming at a very inopportune time, just as some

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<v Speaker 1>of this disinflationary force seems to be taking hold. And

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<v Speaker 1>this is undoubtedly going to complicate what the FEED has

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<v Speaker 1>been trying to achieve. The impact of a cut by

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<v Speaker 1>one point one million barrels will likely lead to higher

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<v Speaker 1>inflation expectations in the month ahead. So even if credit

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<v Speaker 1>conditions tighten in the second half as a result of

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<v Speaker 1>a lot of the stress that we have been seeing

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<v Speaker 1>in the banking system, the notion of rate cuts that

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<v Speaker 1>may be a little more difficult to conceive. We're going

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<v Speaker 1>to take a closer look at that dynamic with our

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<v Speaker 1>guest Peter Cheer of Academy Securities. Coming up, and before

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<v Speaker 1>we go to Global news from Dow Jones, McDonald's will

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<v Speaker 1>reportedly close its US offices temporarily this week. The fast

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<v Speaker 1>food chain is preparing to inform corporate employees about layoffs

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<v Speaker 1>as part of a broader restructuring. News is next. China

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<v Speaker 1>is urging Japan to refrain from joining the US in

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<v Speaker 1>restricting the export and access to chip making equipment at Baxter.

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<v Speaker 1>With more from the Bloomberg Newserman San Francisco Eddie. Yeah,

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<v Speaker 1>that's right do. Beijing is saying the US is trying

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<v Speaker 1>to suppress the Chinese semiconductor industry, and the suggestion comes

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<v Speaker 1>with a veiled threat because it comes at the same

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<v Speaker 1>time Japan is asking for the swift return of a

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<v Speaker 1>Japanese citizen being detained in China. Beijing says a chip

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<v Speaker 1>blockade will only strengthen its resolve and chief self reliance.

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<v Speaker 1>China says a US in the past is suppress Japan

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<v Speaker 1>and now is suppressing China. Meanwhile, the US is called

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<v Speaker 1>in the G seven nations to take joint countermeasures if

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<v Speaker 1>China engages an economic coercion. Donald Trump, the first former

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<v Speaker 1>or sitting president to be criminally indicted, is set to

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<v Speaker 1>be processed, photoed, fingerprinted, and arrange and on Tuesday, US.

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<v Speaker 1>His attorney, Joe Tacopino says that Trump will plead not guilty.

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<v Speaker 1>He's gearing up for a battle. You know, this is

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<v Speaker 1>something that obviously we believe it is a political persecution,

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<v Speaker 1>and I think people on both sides of the I'll

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<v Speaker 1>believe that that's a complete abuse of power. Tacopin on

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<v Speaker 1>ABC has heard here on Bloomberg, says they're thinking about

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<v Speaker 1>a motion to move the trial to Staten Island, but

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<v Speaker 1>needs to actually see the charges first. And we're ready

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<v Speaker 1>for this fight, and I look forward to moving this

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<v Speaker 1>thing along as quickly as possible to exonerate him. He says.

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<v Speaker 1>If this case wasn't Donald Trump, it would never have

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<v Speaker 1>gone this far. Now, if there is a trial, the

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<v Speaker 1>key witness will be Trump fixer Michael Cohen on CBS

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<v Speaker 1>has heard here on Bloomberg. Cohen says well, his testimony

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<v Speaker 1>will not be about him. This is solely about accountability.

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<v Speaker 1>I should not be held accountable for Donald Trump's dirty deeds.

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<v Speaker 1>Let him be held accountable. Let those in his orbit

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<v Speaker 1>that are truly accountable, like Bill Barr Right, who he

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<v Speaker 1>used to weaponize the Justice Department against his critics. He

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<v Speaker 1>says he's ready to be a powerful witness. Meanwhile, Donald

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<v Speaker 1>Trump last week on Fox News said that the final analysis,

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<v Speaker 1>Vladimir Putin will win in Ukraine, but ultimately he's going

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<v Speaker 1>to take over all of Ukraine. So should a former

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<v Speaker 1>president be making those kinds of statements. Well, on CNN today,

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<v Speaker 1>the chair of the Foreign Intelligence Committee, Mike Turner said

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<v Speaker 1>that is not a foregone conclusion at all, and people

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<v Speaker 1>should stop making those kinds of statements. He says Putin

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<v Speaker 1>didn't expect the kind of help in Ukraine that Ukraine

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<v Speaker 1>is getting from NATO. Putin has said, this is not

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<v Speaker 1>about Ukraine, this is about Eastern Europe, this is about NATO,

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<v Speaker 1>this is about our allies. And President She of China

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<v Speaker 1>and Putin together said this is a result of they're

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<v Speaker 1>trying to turn back one hundred years. This is authoritarianism

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<v Speaker 1>versus democracy. We all need to be on the side

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<v Speaker 1>of democracy turners. In southern Poland today, an explosion to

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<v Speaker 1>cafe in Saint Petersburg, Russia, has killed Ladin Tatarowski, the

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<v Speaker 1>military blogger who has supported the war in Ukraine. The

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<v Speaker 1>explosion also injured twenty five people. The device was the

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<v Speaker 1>size of a bar of soap, was hidden in a

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<v Speaker 1>statuette presented to him. That's a task report Global News

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<v Speaker 1>powered by more than twenty seven hundred journalist and a

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<v Speaker 1>list in over one hundred twenty countries. In San Francisco,

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<v Speaker 1>I'm Ed Baxter, and this is Bloomberg. Let's get to

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<v Speaker 1>our guest to Peter Cheer is with us. He is

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<v Speaker 1>head of macro strategy at Academy Securities. On the line

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<v Speaker 1>from here in New York City, Peter, it's always a pleasure.

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<v Speaker 1>Thanks so much. Just when the market seemed to be

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<v Speaker 1>taking a little bit of comfort in this reading on

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<v Speaker 1>the PCE that was below forecast, we have an oil

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<v Speaker 1>shock now with OPEC plus cutting production unexpectedly by more

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<v Speaker 1>than a million barrels a day. What does this do

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<v Speaker 1>to the idea that inflation is going to come down

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<v Speaker 1>anytime soon. I think it throws a little bit of

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<v Speaker 1>a rent into that plan. So just this past week

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<v Speaker 1>I highlighted how much freight shipments were down in the US.

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<v Speaker 1>The imports into ports were way down. So it's actually

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<v Speaker 1>not surprising if OPEC is responding because they're probably seeing

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<v Speaker 1>demand for oil's shrink as the economy is slowing. So

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<v Speaker 1>to me, that's a bit of confirmation the economy is slowing.

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<v Speaker 1>That's why OPEC is responding that way. And the flip

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<v Speaker 1>side of this, it's probably a good reminder of the

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<v Speaker 1>geopolitical influences that are around right now, where countries in

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<v Speaker 1>the the least are less dependent on the US than

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<v Speaker 1>they once were and may be I don't want to

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<v Speaker 1>say lashing out, but expressing their frustration at policies towards

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<v Speaker 1>the Middle East at US. The thing is how much

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<v Speaker 1>of an impact will this have on inflation? And that's

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<v Speaker 1>going to be key here is that we look at

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<v Speaker 1>the federal result. I think it's not going to have

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<v Speaker 1>as much as people thinks. Obviously, the price of oil

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<v Speaker 1>is going to go higher. I think it's trading five

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<v Speaker 1>or six dollars a barrel more and that's going to

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<v Speaker 1>put some pressure on the system. But as a whole.

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<v Speaker 1>I think it's in response to the slowing that they're

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<v Speaker 1>seeing that showing up in the data, that freight's turning down,

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<v Speaker 1>that things like the Baltic Drive and turning down. So

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<v Speaker 1>I think it's going to create a little bit of

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<v Speaker 1>inflation fear earlier in the week, But to me, it's

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<v Speaker 1>really going to resonate with the recession is coming crowd

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<v Speaker 1>and people are going to be able to talk about

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<v Speaker 1>ALPEC doing this because they're seeing so much less demand

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<v Speaker 1>because the economy is slowing much more than the official

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<v Speaker 1>data is hinting at. But I'm wondering if we begin

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<v Speaker 1>to see a move up in inflation expectations even before

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<v Speaker 1>some of the data points began to roll over, and

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<v Speaker 1>whether or not that complicates the Fed's job and the

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<v Speaker 1>notion of rate cuts really are taken off the table

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<v Speaker 1>between now and the end of the year. I think

0:12:32.559 --> 0:12:34.920
<v Speaker 1>the FED was already trying to get the rate cuts

0:12:34.960 --> 0:12:37.240
<v Speaker 1>off the table, and they already have an incredibly tough

0:12:37.320 --> 0:12:39.520
<v Speaker 1>job trying to figure out what they've already done had

0:12:39.559 --> 0:12:42.880
<v Speaker 1>they pushed too far, what triggered the crisis with Silicon

0:12:43.000 --> 0:12:45.680
<v Speaker 1>Valley Bank. So they were already in a rock and

0:12:45.720 --> 0:12:47.760
<v Speaker 1>hard place. This is just going to add to that

0:12:47.880 --> 0:12:51.200
<v Speaker 1>pressure right now. With that in mind, I mean, let's

0:12:51.200 --> 0:12:54.280
<v Speaker 1>not forget that. You know, as we see what happened

0:12:54.280 --> 0:12:58.160
<v Speaker 1>with the banks and the liquidity issues, when does this

0:12:58.200 --> 0:13:01.640
<v Speaker 1>also affect credit? And I mean that we got these

0:13:01.640 --> 0:13:03.320
<v Speaker 1>banks who are lightly to be putting up the drool

0:13:03.679 --> 0:13:06.680
<v Speaker 1>bridge is going to be having much stricter criteria for

0:13:06.960 --> 0:13:09.040
<v Speaker 1>making loans and the light that that could, of course

0:13:09.040 --> 0:13:11.520
<v Speaker 1>act as I think they fed themselves suggested between twenty

0:13:11.559 --> 0:13:13.480
<v Speaker 1>five and fifty basis points as tightening, but it could

0:13:13.480 --> 0:13:16.360
<v Speaker 1>be much more surely, So I think it's happening. The

0:13:16.760 --> 0:13:18.320
<v Speaker 1>good news, I guess in some ways is that it

0:13:18.360 --> 0:13:20.360
<v Speaker 1>started happening over a year ago. So when I talked

0:13:20.360 --> 0:13:24.480
<v Speaker 1>to large banks, large institutional lenders, they were already tightening

0:13:24.520 --> 0:13:27.200
<v Speaker 1>credit standards. So this has been in the past, so

0:13:27.400 --> 0:13:29.040
<v Speaker 1>it's going to hurt a little bit more. I think

0:13:29.040 --> 0:13:32.280
<v Speaker 1>what's really difficult to tell is that it's probably going

0:13:32.360 --> 0:13:35.640
<v Speaker 1>to hit small and midsized companies more than the big

0:13:35.640 --> 0:13:37.600
<v Speaker 1>companies or anythink the big companies have been very good

0:13:37.640 --> 0:13:40.080
<v Speaker 1>credits companies that have went to them have done well,

0:13:40.520 --> 0:13:43.959
<v Speaker 1>so I don't think it's going to be dramatic, but

0:13:44.000 --> 0:13:45.600
<v Speaker 1>it is going to be there. I think we're gonna

0:13:45.600 --> 0:13:47.839
<v Speaker 1>have to watch local economies very closely because I think

0:13:47.840 --> 0:13:50.200
<v Speaker 1>this is going to be a very local phenomena. Peter,

0:13:50.280 --> 0:13:53.199
<v Speaker 1>as you know, we saw enormous volatility in US treasuries

0:13:53.640 --> 0:13:56.400
<v Speaker 1>for most of the month of March. In your view

0:13:56.480 --> 0:13:58.600
<v Speaker 1>or things going to be calmer now as we get

0:13:58.640 --> 0:14:02.360
<v Speaker 1>into the second order, I hope so, But the reality

0:14:02.440 --> 0:14:04.680
<v Speaker 1>is I don't think they will be. I think we've

0:14:04.679 --> 0:14:08.960
<v Speaker 1>traded our liquidity system for something that creates the perception

0:14:09.000 --> 0:14:12.000
<v Speaker 1>of liquidity when you don't get big moves, so everything's

0:14:12.000 --> 0:14:15.040
<v Speaker 1>super liquid looking. There's little bit off or costs because

0:14:15.080 --> 0:14:17.520
<v Speaker 1>all these algos are there. But if someone has some

0:14:17.640 --> 0:14:20.880
<v Speaker 1>size to move, liquidity dissipates pretty quickly. And we're heading

0:14:20.920 --> 0:14:23.160
<v Speaker 1>into the summer, so I think this might just be

0:14:23.200 --> 0:14:29.000
<v Speaker 1>a brief respite from that higher volatility. April it's traditionally

0:14:29.200 --> 0:14:33.040
<v Speaker 1>the best, if not one of the best months for equities.

0:14:33.480 --> 0:14:37.640
<v Speaker 1>Are you killing your loins in optimism and an anticipation?

0:14:38.680 --> 0:14:41.080
<v Speaker 1>I am actually not this time. I started being a

0:14:41.080 --> 0:14:43.760
<v Speaker 1>little bit cautious last week. Obviously was wrong. We had

0:14:43.760 --> 0:14:45.560
<v Speaker 1>a nice three and a half percent equity rally in

0:14:45.600 --> 0:14:47.840
<v Speaker 1>the US, and I'm actually getting more cautious. You know,

0:14:47.840 --> 0:14:49.840
<v Speaker 1>I had to rethink about was I wrong, what did

0:14:49.880 --> 0:14:52.360
<v Speaker 1>I miss? And I think the markets got ahead of

0:14:52.400 --> 0:14:54.280
<v Speaker 1>themselves last week, and I'm looking for a bit of

0:14:54.320 --> 0:14:57.760
<v Speaker 1>a pullback and if anything, hopefully for my sake, these

0:14:57.800 --> 0:14:59.800
<v Speaker 1>higher oil prices push us down a little bit on

0:15:00.720 --> 0:15:04.080
<v Speaker 1>I'm curious to get your take on China right now, Peter,

0:15:04.200 --> 0:15:07.320
<v Speaker 1>and how you're viewing what has been a pretty impressive

0:15:08.360 --> 0:15:11.200
<v Speaker 1>reopening story. It may be waning just a little bit

0:15:11.240 --> 0:15:14.480
<v Speaker 1>at the moment, but are you bullish on the China story?

0:15:15.160 --> 0:15:17.720
<v Speaker 1>I am not. I continue to see the one thing

0:15:17.720 --> 0:15:21.640
<v Speaker 1>the US politicians are bipartisan on is their distrust of China,

0:15:21.760 --> 0:15:24.800
<v Speaker 1>and I think that friction is real. I thought it

0:15:24.840 --> 0:15:28.520
<v Speaker 1>was encouraging jack Ma was allegedly back on shore and

0:15:28.800 --> 0:15:32.160
<v Speaker 1>being involved in some things. I just see this long

0:15:32.280 --> 0:15:35.480
<v Speaker 1>term trend that China is less to do with the US,

0:15:35.920 --> 0:15:37.920
<v Speaker 1>and so that's why I can't get too bullish over

0:15:38.000 --> 0:15:43.040
<v Speaker 1>China again. You know, you know sort of seen the

0:15:43.080 --> 0:15:46.640
<v Speaker 1>regulatory I guess a storm Claus disappeared, But you know,

0:15:46.680 --> 0:15:49.480
<v Speaker 1>when you've got something like the breakup of Ali Baba

0:15:49.720 --> 0:15:52.280
<v Speaker 1>doesn't that in any way change that you're thinking, given

0:15:52.280 --> 0:15:55.400
<v Speaker 1>that it perhaps may indicate that they are turning more

0:15:55.520 --> 0:16:00.400
<v Speaker 1>market friendly once again, there's certainly it was an encouraging steps.

0:16:00.440 --> 0:16:04.520
<v Speaker 1>So it made me from Diehardberrish to Okay, let's think

0:16:04.560 --> 0:16:07.560
<v Speaker 1>about what they're doing. But China does play a long game,

0:16:07.640 --> 0:16:10.160
<v Speaker 1>and I can't really tell whether this is a significant

0:16:10.160 --> 0:16:12.000
<v Speaker 1>concession that's going to be good for us in the

0:16:12.000 --> 0:16:15.120
<v Speaker 1>long run, or this is just keeping the wheels turning right.

0:16:15.160 --> 0:16:17.280
<v Speaker 1>I think China is very good every time the US

0:16:17.320 --> 0:16:20.080
<v Speaker 1>pushes hard on it, coming up with some plan that

0:16:20.160 --> 0:16:22.920
<v Speaker 1>lets the US back off and say, Okay, China's playing

0:16:23.000 --> 0:16:25.280
<v Speaker 1>nice again, only to realize six months to a year

0:16:25.320 --> 0:16:28.040
<v Speaker 1>down the road they're not. And I think the earlier

0:16:28.080 --> 0:16:31.040
<v Speaker 1>segment you were talking about China and Japan on chips,

0:16:31.200 --> 0:16:33.880
<v Speaker 1>I think that's a much bigger issue. There's this overall

0:16:34.400 --> 0:16:37.840
<v Speaker 1>almost chip battle going on, and that's going to override

0:16:38.040 --> 0:16:40.360
<v Speaker 1>all the little things that we're seeing. So I just

0:16:40.400 --> 0:16:43.440
<v Speaker 1>can't get that comfortable with China. Well, you mentioned Japan there, Peter,

0:16:43.560 --> 0:16:45.120
<v Speaker 1>And as you know, at the end of the week,

0:16:45.640 --> 0:16:49.440
<v Speaker 1>Harihiko Coroda will end what has been a ten year

0:16:49.760 --> 0:16:52.520
<v Speaker 1>run as the head of the Bank of Japan. A

0:16:52.600 --> 0:16:56.520
<v Speaker 1>new governor, Kazuo Ueita, will take the reins, and there

0:16:56.520 --> 0:16:58.920
<v Speaker 1>had been a lot of speculation as to whether or

0:16:58.920 --> 0:17:00.720
<v Speaker 1>not we're going to see a Polish to shift on

0:17:00.760 --> 0:17:03.160
<v Speaker 1>the part of the BOJ under this new governor. Is

0:17:03.200 --> 0:17:06.280
<v Speaker 1>that something you're expecting. I would expect to see a

0:17:06.280 --> 0:17:09.760
<v Speaker 1>little bit of a shift. They've been somewhat the one outlier,

0:17:09.800 --> 0:17:12.399
<v Speaker 1>I think, as the ECB and FET have been so aggressive.

0:17:12.720 --> 0:17:15.440
<v Speaker 1>Japan has done a few things like these restrictions on

0:17:15.880 --> 0:17:18.320
<v Speaker 1>their targeting of where the tenure has to trade, but

0:17:18.400 --> 0:17:20.720
<v Speaker 1>they've still been relatively easy money. So it would not

0:17:20.760 --> 0:17:23.160
<v Speaker 1>surprise me to see them fold into the world order

0:17:23.200 --> 0:17:25.240
<v Speaker 1>a little bit more and come out a little bit hockey,

0:17:25.400 --> 0:17:28.680
<v Speaker 1>which I think would be a surprise. Well as what's

0:17:28.720 --> 0:17:35.040
<v Speaker 1>his legacy. Yeah, that's a hard one to say. I

0:17:35.040 --> 0:17:38.000
<v Speaker 1>think China, you know, sorry, Japan. The one thing they

0:17:38.040 --> 0:17:40.119
<v Speaker 1>managed to go through this crisis is they did not

0:17:40.240 --> 0:17:41.960
<v Speaker 1>have the inflation that the rest of the world had,

0:17:42.119 --> 0:17:43.720
<v Speaker 1>and that's something I think we're all trying to figure

0:17:43.720 --> 0:17:46.360
<v Speaker 1>out why why not. I do think Japan's actually gonna

0:17:46.359 --> 0:17:49.399
<v Speaker 1>be a really interesting investing story as countries get more

0:17:49.400 --> 0:17:52.359
<v Speaker 1>and more nervous about China and their sphere of influence. Japan,

0:17:52.440 --> 0:17:54.640
<v Speaker 1>I think is a very good foil to that, and

0:17:54.720 --> 0:17:56.720
<v Speaker 1>I'm expecting Japan to actually do very well of the

0:17:56.760 --> 0:17:59.520
<v Speaker 1>coming years. So, Peter, if you had to begin the

0:17:59.560 --> 0:18:03.120
<v Speaker 1>second quarter on taking a long position in markets globally

0:18:03.200 --> 0:18:06.560
<v Speaker 1>right now, is there a case or something that you

0:18:06.600 --> 0:18:12.160
<v Speaker 1>see a scenario that is particularly attractive. I actually like Japan.

0:18:12.280 --> 0:18:14.760
<v Speaker 1>I think is interesting, and I've got to rethink. I

0:18:14.800 --> 0:18:17.159
<v Speaker 1>was actually very bullish energy because I believe a lot

0:18:17.240 --> 0:18:20.040
<v Speaker 1>of people were playing energy from the short side, thinking

0:18:20.080 --> 0:18:21.679
<v Speaker 1>that that was going to be one way to express

0:18:21.680 --> 0:18:26.440
<v Speaker 1>the economic slowdown, and OPEC plus's willingness to restrict that

0:18:26.720 --> 0:18:29.160
<v Speaker 1>might make that trade even more interesting and could help

0:18:29.440 --> 0:18:35.120
<v Speaker 1>energy companies across the globe. What would be your trade though,

0:18:35.200 --> 0:18:39.480
<v Speaker 1>what would be your favorite trade? I like some of

0:18:39.520 --> 0:18:43.040
<v Speaker 1>the European energy companies that are very progressive in terms

0:18:43.080 --> 0:18:45.879
<v Speaker 1>of moving towards sustainability, but have a very good core business.

0:18:46.240 --> 0:18:49.240
<v Speaker 1>So I like that right now, and I would probably

0:18:49.240 --> 0:18:52.400
<v Speaker 1>buy some long dated treasuries, and overall, I would short

0:18:52.480 --> 0:18:55.160
<v Speaker 1>some of the more disruptive things that have moved up recently,

0:18:55.600 --> 0:18:59.200
<v Speaker 1>very quickly Peter on the subject of geopolitics, how are

0:18:59.240 --> 0:19:04.200
<v Speaker 1>you evalue waiting that risk globally right now? So you know,

0:19:04.240 --> 0:19:06.880
<v Speaker 1>at Academy we work for seventeen retire generals and admirals.

0:19:06.920 --> 0:19:08.520
<v Speaker 1>We talked about this all the time. We've felt some

0:19:08.560 --> 0:19:11.040
<v Speaker 1>recent summits. There has not been a time in the

0:19:11.119 --> 0:19:14.360
<v Speaker 1>last five years that we have seen as much geopolitical

0:19:14.440 --> 0:19:17.399
<v Speaker 1>risk out there, and very meaningful geopolitical risk that you

0:19:17.400 --> 0:19:20.359
<v Speaker 1>could see China's selling weapons to Russia, which I think

0:19:20.359 --> 0:19:24.520
<v Speaker 1>would be dramatic for the markets. North Korea is saber

0:19:24.600 --> 0:19:27.640
<v Speaker 1>rattling again, so I'm very nervous and I don't see

0:19:27.640 --> 0:19:30.840
<v Speaker 1>a lot of good outcomes on the geopolitical front. So

0:19:31.160 --> 0:19:32.960
<v Speaker 1>that's something I think the market is not pricing in

0:19:33.119 --> 0:19:37.040
<v Speaker 1>right now. This is Bloomberg day Break Asia. You're a

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